Moleculin Biotech (MBRX) risk factors, FY2024 10-K

Risks Related to Regulatory Approval and the Development and Commercialization of our Drug Candidates

1. 01We are developing our drugs to treat patients who are extremely or terminally ill, and patient deaths that occur in our clinical trials could negatively impact our business even if such outcomes are not shown to be related to our drugs
2. 02Delays in the commencement, enrollment and completion of clinical trials could result in increased costs to us and delay or limit our ability to obtain regulatory approval for any of our product candidates
3. 03We may expend significant resources to pursue certain product candidates for specific indications and fail to capitalize on the potential of such product candidates for the potential treatment of other indications that may be more profitable or for which there is a greater likelihood of success
4. 04Our product candidates may have undesirable side effects that may delay or prevent marketing approval, or, if approval is received, require them to be taken off the market, require them to include safety warnings or otherwise limit their sales
5. 05We received ODD for Annamycin, WP1066, and WP1122, but even if either product candidate is approved and receives ODE, ODE may not effectively prevent approval of a competing product
6. 06We, or our third-party manufacturers, may be unable to successfully scale-up manufacturing of our product candidates in sufficient quality and quantity, which would delay or prevent us from developing our product candidates and commercializing approved products, if any
7. 18We are developing our drug candidates to treat patients who are extremely or terminally ill, and severe adverse outcomes, including patient deaths, that occur in our clinical trials could negatively impact our business even if such outcomes are not shown to be related to our drugs
8. 19We are conducting important clinical trials in the US and Europe, and assessing additional countries in which to perform preclinical studies and clinical trials, and the risks associated with conducting research and clinical trials abroad could materially adversely affect our business
9. 20These and other risks associated with our international operations may materially adversely affect our ability to attain or maintain profitable operations
10. 21disruptions to the operations of our third-party manufacturers or suppliers caused by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier
11. 22If our third-party drug suppliers fail to achieve and maintain high manufacturing standards in compliance with cGMP regulations, we could be subject to certain product liability claims in the event such failure to comply resulted in defective products that caused injury or harm
12. 23Our business currently depends on the successful development and commercialization of our drug candidates. Our ability to generate revenue related to product sales, if ever, will depend on the successful development and regulatory approval of our drug candidates
13. 24If we are unable to obtain approval from the FDA, or other regulatory agencies, for any of our product candidates, or if, subsequent to approval, we are unable to successfully commercialize our product candidates, we will not be able to generate sufficient revenue to become profitable or to continue our operations
14. 25Changes in funding for the FDA and other government agencies and the implementation of tariffs could prevent new products and services from being developed or commercialized in a timely manner or at all, which could negatively impact our business
15. 26In addition, a portion of our supply chain is located in countries that may be subject to new or increased tariffs, which could lead to increased costs to us. This exposure to international trade policies poses a risk to our operations and our financial condition
16. 27unfavorable FDA or other regulatory agency inspection and review of a clinical trial site or vendor
17. 28As an organization, we have never before conducted pivotal clinical trials, and we may be unable to do so for any product candidates we may develop
18. 29We have commenced clinical trials and have never submitted an NDA, and any product candidate we advance through clinical trials may not have favorable results in later clinical trials or receive regulatory approval
19. 30unforeseen safety issues
20. 31We may find it difficult to enroll subjects in our clinical trials, which could delay or prevent clinical trials of our product candidates
21. 32We may not be able to initiate or continue clinical trials if we cannot enroll a sufficient number of eligible subjects to participate in the clinical trials required by regulatory agencies
22. 33A portion of our clinical development plan relies on physician-sponsored trials, which we do not control, and which may encounter delays for reasons outside of our control
23. 34our reputation may suffer
24. 35Even if our product candidates otherwise qualify for approval from the FDA, if the FDA does not find the manufacturing facilities of our future contract manufacturers acceptable for commercial production, we may not be able to commercialize our product candidates
25. 36the possibility of termination or nonrenewal of the agreements by the third parties before we are able to arrange for a qualified replacement third-party manufacturer
26. 37We received four rare pediatric disease designations for WP1066, but may not be able to obtain a rare pediatric disease priority review voucher if WP1066 is approved or obtain future rare pediatric disease designations for our product candidates, which could adversely affect our potential profitability
27. 38Interim or preliminary data from our clinical trials that we announce or publish from time to time may change as more subject data become available and are subject to audit and verification procedures that could result in material changes in the final data
28. 39Recently enacted legislation, future legislation and healthcare reform measures may increase the difficulty and cost for us to obtain marketing approval for and commercialize Annamycin and any future product candidates and may affect the prices we may set

Risks Related to Our Intellectual Property

1. 07If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and products could be significantly diminished

Risks Relating to Our Business and Financial Condition

1. 08We will require additional funding, which may not be available to us on acceptable terms, or at all, and, if not so available, may require us to delay, limit, reduce or cease our operations
2. 09Because successful development of our product candidates is uncertain, we are unable to estimate the actual amount of funding we will require to complete research and development and commercialize our products under development
3. 10We have in the past completed related party transactions that were not conducted on an arm’s length basis
4. 11We have no sales, marketing or distribution experience and we will have to invest significant resources to develop those capabilities or enter into acceptable third-party sales and marketing arrangements
5. 12New tax laws or regulations that are enacted or existing tax laws and regulations that are interpreted, modified, or applied adversely to us or our customers may have a material adverse effect on our business and financial condition

Risks Relating to Our Common Stock

1. 13As a biotechnology company, we are at increased risk of securities class action litigation
2. 14Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price
3. 64Our stock price has been and may continue to be volatile, which could result in substantial losses for investors
4. 65Shares issuable upon the exercise of outstanding options or warrants may substantially increase the number of shares available for sale in the public market and depress the price of our common stock
5. 66If we are unable to maintain compliance with the listing requirements of The Nasdaq Capital Market, our common stock may be delisted from The Nasdaq Capital Market which could have a material adverse effect on our financial condition and could make it more difficult for you to sell your shares
6. 67Failure to maintain our accounting systems and controls could impair our ability to comply with the financial reporting and internal controls requirements for publicly traded companies
7. 68On March 22, 2024, we completed a one-for-fifteen reverse stock split of our shares of common stock. The reverse stock split was effected in accordance with the authorization adopted by our stockholders at a special meeting of stockholders held in October 2023
8. 69There are provisions in certain of our outstanding warrants that could discourage an acquisition of us by a third party

General Risks

1. 15Your ownership may be diluted if additional capital stock is issued to raise capital, to finance acquisitions or in connection with strategic transactions
2. 16We have no intention of declaring dividends in the foreseeable future
3. 17Shareholder activism could cause material disruption to our business
4. 70Your ownership may be diluted if additional capital stock is issued to raise capital, to finance acquisitions or in connection with strategic transactions
5. 71Negative research about our business published by analysts or journalists could cause our stock price to decline. A lack of regularly published research about our business could cause trading volume or our stock price to decline
6. 72Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us
7. 73Artificial intelligence presents risks and challenges that can impact our business, including by posing security risks to our confidential information, proprietary information and personal data
8. 74Certain provisions in our organizational documents could enable our board of directors to prevent or delay a change of control

Risks Related to our Intellectual Property

1. 40The composition of matter patent for Annamycin has expired, and other patents have not yet been issued, and may not be issued
2. 41The intellectual property rights we have licensed from MD Anderson are subject to the rights of the US government
3. 42We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights
4. 43We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers
5. 44If we breach any of the agreements under which we license patent rights or if we fail to meet certain development deadlines, pay certain fees including extension fees or exercise certain rights to technology, we could lose or fail to obtain license rights that are important to our business
6. 45We will not be able to protect our intellectual property rights throughout the world

Risks Relating to Our Business and Our Financial Condition

1. 46We will require additional funding, which may not be available to us on acceptable terms, or at all, and, if not so available, may require us to delay, limit, reduce or cease our operations
2. 47the economic and other terms, timing of and success of our existing licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future
3. 48We have commenced clinical trials, have a limited operating history and we expect a number of factors to cause our operating results to fluctuate on an annual basis, which may make it difficult to predict our future performance
4. 49We have never been profitable, we have no products approved for commercial sale, and to date we have not generated any revenue from product sales. As a result, our ability to reduce our losses and reach profitability is unproven, and we may never achieve or sustain profitability
5. 50We may not be successful in establishing and maintaining development and commercialization collaborations, which could adversely affect our ability to develop certain of our product candidates and our financial condition and operating results
6. 51We face competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively
7. 52We will need to expand our operations and increase the size of our company, and we may experience difficulties in managing growth
8. 53We may not be able to manage our business effectively if we are unable to attract and retain key personnel and consultants
9. 54We do not expect that our insurance policies will cover all of our business exposures thus leaving us exposed to significant uninsured liabilities
10. 55We may incur penalties if we fail to comply with healthcare regulations
11. 56We may not be able to recover from any catastrophic event affecting our suppliers
12. 57Our business and operations would suffer in the event of third-party computer system failures, cyber-attacks on third-party systems or deficiency in our cyber security
13. 58Our failure to comply with data protection laws and regulations could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results
14. 59We depend on our information technology and infrastructure so compromises could materially harm our ability to conduct business or delay our financial reporting
15. 60New tax laws or regulations that are enacted or existing tax laws and regulations that are interpreted, modified or applied adversely to us or our customers may have a material adverse effect on our business and financial condition
16. 61We must comply with indirect tax laws in multiple jurisdictions, as well as complex customs duty regimes worldwide. Audits of our compliance with these rules may result in additional liabilities for taxes, duties, interest and penalties related to our international operations which would reduce our profitability
17. 62Errors in our assumptions, estimates and judgments related to tax matters, including those resulting from regulatory reviews, could adversely affect our financial results
18. 63We will require significant additional funding to complete the MIRACLE trial, which may not be available to us on acceptable terms, or at all, and, if not so available, may require us to delay, limit, reduce or cease our operations